Question about the drilling process

Just wondering if it is normal practice for the wells to have a rig come and drill only one leg then move on to another location then come back to drill additional legs.  If so, why don't they just drill all 6 legs at once?

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Permalink Reply by pamacraw on June 17, 2012 at 12:46pm
Thank you
Permalink Reply by pamacraw on June 17, 2012 at 2:22pm

Very interesting. Thanks :)  

Permalink Reply by Area Man on June 18, 2012 at 2:05am

It really depends on what the operator is looking for - if it is production only, then the efficiencies gained in keeping the rig around means drilling all 6 is the way to go.  But really, anything in these parts has not progressed that far.  Only areas in NE PA are in development mode, and that's dry gas so being ramped back.

I would definitely say if an operator drilled one well, it's for data gathering or to hold leases (as already mentioned).  The Utica is still very much in its infancy so properly defining the extent and sweet spots of the play will necessarily mean a lot of single well pads for now.  However, most if not all pads are designed to be re-occupied down the road.

 

Oh, lastly, it is not uncommon to have a small rig drill a portion of the well, and have a large (more expensive) rig come in and finish the job.  Just in case anyone is curious why you may have multiple rigs for a single well.

Hope that helps!

-Area Man

0i7okn54zwbdoPermalink Reply by 0i7okn54zwbdo on June 18, 2012 at 2:29am

Here's the math.  It may illuminate you on this subject.  I hope it is informative.

Average savings to an operator when drilling six legs rather than just one is ~$1,000,000.  That comes from a trade magazine that I receive monthly, so I will assume that it is accurate.  Moving a rig to another location and HBPing another 640 acres saves $3,200,000 in potential future lease bonus money (assuming a flat $5,000/acre).  Remember, a 640 acre unit doesn't necessarily hold only 640 acres.  If someone has an older lease that encompasses 500 acres of their property you can hold that whole lease by adding any and all of their land to a unit.  So if they only have 100 acres in the 640 unit you're actually holding 1,040 acres at once (540 unit+100 from landowner in example+400 additional leased acres= 1,040)  Holding their entire lease with just one well saves a huge future signing bonus cost.  That's why so many newer leases have included Pugh clauses.  Older leases (most of them, anyway) don't limit how much or how little of the lease is held by one well.

Permalink Reply by Lori Weiss on June 18, 2012 at 2:32am

Here is Susquehanna, Cabot is actively drilling all of the wells on a single pad.  This was confirmed by the property owner at the time.  They drilled all six of his wells one after the other.  It's more cost efficient to keep the rig in one location rather than move it from here to there.  This was a comment by a Cabot spokesperson I'd found somewhere on the web.  Perhaps this is more a Cabot "thing" and less common place.  Hope this helps.

Jim ShoosPermalink Reply by Jim Shoos on June 18, 2012 at 3:04am

You are undoubtedly confused by all the conflicting information flying at you.  The long and short answer to your question is "it depends".  There is no "norm".  For all the reasons cited by others in this thread, each well, each set of circumstances are unique to each well and each operator.  It is categorically more cost effective to not pay mobilization and demobilization charges to move a rig to another pad versus skidding it over to drill additional laterals on the same pad.  Depending upon the distance to the next pad an operator can incur $250,000 for each rig move.  Sometimes circumstances don't allow an operator to follow the most cost effective path.

Permalink Reply by Area Man on June 18, 2012 at 3:51am

Yeah, pretty much sums it up!

Permalink Reply by joe pierson on June 18, 2012 at 4:25am

The best unit in Washington has all legs drilled, count them!

http://i37.photobucket.com/albums/e79/g_partin/BestUnit1H-7H6-Wotri...

Permalink Reply by Lori Weiss on June 18, 2012 at 6:24am

If you're asking about my post in Susquehanna, yes, all six were drilled without moving the rig off of the pad.  Actually, one well had an issue and drilling had to stop for a couple of months on that particular one, so they moved on and then came back to finish it.  I'm pretty sure they've been moving their rigs around our area from one pad to another--probably the same rig.  There are four to five pads within a few miles of each other in my neck of the woods.  Two got six, mine has four, another has two, and I forget how many the other pad was getting.  I think Cabot only has about six or seven rigs, so I wouldn't doubt it's the same rig moving about in our area.  I know they're active in other townships around Susquehanna as well.  It would seem while they're drilling one, they're fracking another, and flaring another.  We can only guess this due to the heavy wooded areas.  We see the tops of rigs over the trees from I-81, conga lines of water trucks along different back roads, and flaring from the ones we can actually see.  One pad had four tubes flaring at one time.  

Permalink Reply by joe pierson on June 18, 2012 at 7:29am

the drill moved from one site to the other, very slowly, all the wells were then "zipper" fracked one right after the other, I don't know how successful it all was

http://i37.photobucket.com/albums/e79/g_partin/BestUnit1H-7H1-Wotri...

 

Permalink Reply by Jim Litwinowicz on June 18, 2012 at 4:29am

A couple of other things; They drill one well and move out the rig to make room for the fracking and completion crews and equipment. They make the pads as small as possible to minimize impact and there ain't a lot of room to work.

Plus, they drill one well and complete it to see what is there before installing a pipeline. No use installing a line until you have proven production. Also no use drilling six wells at once if the capacity to move the gas is limited. As wells deplete and pipeline capacity becomes available, drill a couple more.

And they need to see what is produced to decide just what equipment they need to treat and separate the various constituents.


Last, they study the well, the gas, the strata, the flowback, and learn better ways to do the next fracture job. Do them all at once and you may get less production.

Permalink Reply by pamacraw on June 18, 2012 at 4:50am
So if your property is included in the production unit of 1 leg. with a min production unit of 160 acres but the total min production unit is, say 640 acres, when the first leg starts producing does the entire 640 collect royalties? Or does it only pay royalties if you are part of the 160 acre leg of the unit?? (WAS THAT CONFUSING?)

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